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In a fresh set of allegations against the Adani Group of companies, the Organised Crime and Corruption Reporting Project (OCCRP) has said that millions of dollars were invested in some publicly traded stocks of the group through “opaque” Mauritius funds.
In its report, nonprofit media organization OCCRP said the way of investment “obscured” the involvement of alleged business partners of the Adani family, Reuters reported on Thursday.
OCCRP, citing a review of files from multiple tax havens and internal company emails, stated that during its probe they found at least two cases where the investors bought and sold Adani stock through such offshore structures.
The report comes at least eight months after US-based short-seller Hindenburg Research accused the ports-to-energy conglomerate of improper business dealings, including the use of offshore entities in tax havens.
The short seller said the group used tax havens such as Mauritius from where it said certain offshore funds “surreptitiously” owned stock in Adani’s listed firms.
Adani Group has refuted Hindenburg’s claims and claimed it always complied with laws.
In a statement to OCCRP, Adani Group said the Mauritius funds investigated by reporters had already been named in the Hindenburg report and the “allegations are not only baseless and unsubstantiated but are rehashed from Hindenburg’s allegations.”
“It is categorically stated that all the Adani Group’s publicly listed entities are in compliance with all applicable laws including the regulation relating to public shareholdings,” the Adani Group told the OCCRP.
The OCCRP report named two individual investors – Nasser Ali Shaban Ahli and Chang Chung-Ling – who made the alleged investments. OCCRP described both as “longtime business partners” of the Adani family.
The media organization said there was no evidence Chang and Ahli’s money for their investments came from the Adani family, but said its reporting and documents – including an agreement, corporate records and an email – showed there “is evidence” that their trading in Adani stock “was coordinated with the family”.
“The question of whether this arrangement is a violation of the law rests on whether Ahli and Chang should be considered to be acting on behalf of Adani promoters, a term used in India to refer to the majority owners of a business,” OCCRP said.
OCCRP said their stake in Adani holdings would exceed the 75 per cent limit allowed for insider ownership.
Ahli and Chang reportedly did not respond to OCCRP’s requests for comments.
Hindenburg allegations and probe on Adani group
The Hindenburg report came as a serious jolt to billionaire Gautam Adani and his ports-to-energy conglomerate.
Days following the January report, Adani group stocks lost $150 billion in market value and remain down around $100 billion. In the last few months, the group stocks recovered after the conglomerate repaid some debt and regained some investor confidence.
The crisis also forced him to shelve a $2.5 billion share sale and convince banks about his business credentials.
Later on, the Supreme Court appointed a panel to oversee a market regulator Securities and Exchange Board of India probe based on the Hindenburg report.
In May, the panel said the regulator had so far “drawn a blank” in investigations into suspected violations in overseas investments in the Adani Group.
On August 25, Sebi submitted its status report on the investigation into the allegations to the apex court.
Initially, Sebi was asked to submit its investigation report by August 14. However, the capital markets regulator asked for a 15-day extension and submitted its status report on August 25.
The content of the Sebi report has not been made public so far. However various reports said that Sebi’s probe document would shed light on the progress of the extensive probe, which encompasses a total of 24 investigations related to various aspects of the Adani conglomerate’s activities.
Of these 24 investigations, a substantial 22 have already reached their conclusion, resulting in the issuance of final investigation reports. Additionally, one interim investigation report has been prepared as part of the ongoing scrutiny of Adani Group’s operations.
Sebi informed the apex court that it was still awaiting information from five tax havens on actual owners behind foreign investors investing in the conglomerate, PTI reported.
The course of action regarding the interim report remains contingent on receiving vital information from overseas regulators. Sebi has said that it will finalise its actions once this crucial overseas data becomes available.
It said its report was nearing completion and its investigation on some offshore deals was taking time as some entities were located in tax haven jurisdictions. The regulator “shall take appropriate action based on outcome of the investigations,” it said.
Also read: Adani-Hindenburg issue: ‘Regulatory tools can lead to better corporate governance,’ says FM Sitharaman
Also read: Adani-Hindenburg: SC postpones hearing; Sebi awaiting response from 5 tax havens
Also read: Adani Enterprises, Adani Power, Adani Green Energy shares: Adani stocks in news after OCCRP report on opaque Mauritius funds
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